Determining Competitiveness

WIFO in general and Karl Aiginger in particular were among the first to point out that in highly developed industrial countries prices and costs are just one of many (and usually not even the most important) elements of competitiveness; in this case applying business management insights to countries is greatly misleading. Drawing on WIFO publications, the article traces the route from competition on prices to competition on quality to the technological race and a "high-road strategy" where competitiveness is determined by structure, innovation and education as much as by the social system and institutions.